Bisalloy Steel (ASX:BIS) is an Australian steel manufacturer that specialises in designing and producing high-strength steel products, and has done so for over 40-years.
Publicly listed since 2003, BIS offers a range of products including wear-resistant steel plates, military-grade armour, structural steel, and mining equipment. BIS is Australia’s only quench and tempered (Q&T) steel plate producer which serves our mining and defence industries. One of the notable products from BIS is their Bisalloy Armor steel, which is specifically developed for military applications, with this product being used in our Collins Class submarines and Bushmaster vehicles deployed in the Ukraine conflict.
BIS comprises two operating segments, Australia and Overseas. Their Australian operations manufacture and sell wear-grade and high tensile plate through distributors and directly to OEMs in Australia and abroad.
Their Overseas operations comprise three entities operating in China, Indonesia and Thailand which distribute Q&T plate as well as other steel plate products.
The Australian segment of the business is the largest by far contributing $128.8m to total FY23 revenue of $153.1m, with the overseas segment contributing $24.3m in revenue. FY23 revenue was up 30% on FY22, but due to higher inputs (gas & electricity) and freight costs, earnings and profits declined 7.5% and profit 14.6%. BIS has reduced their workshop employees by 20% to help offset rising costs.
Further impacting the full potential of sales was a change to their enterprise resource planning system (ERP) which impacted sales of some products, this has been rectified. Despite these headwinds, BIS continues to be a profitable company generating solid returns and paying dividends and will pay a special dividend of 10c per share in November 2023 (goes ex on 16th November)..
Looking forward to FY24 and beyond BIS is continuing with its growth strategy of focusing on the premium grades of Q&T steels, including armour and defence grades, while developing the volume growth of other products.
StockRank:
Given the headwinds the business has faced, their StockRank and QVM scores are impressive and speak to the underlying quality of the business and the demand for their products. BIS have continued…
